Five horsemen of the euro’s future

The threat of an imminent Greek exit from the euro may be the talk of Brussels, but the EU is unveiling bold proposals this week to deepen political and financial integration inside the eurozone.

A so-called “five presidents’ report” obtained by POLITICO includes calls for a eurozone finance minister and stricter controls over the budgets of the 19 countries, including Greece, that use the single currency.

The glossy 24-page document (28 in the German version) — entitled “Completing Europe’s Monetary and Economic Union” — will be published on Monday. It’s to be discussed at the EU summit that begins Thursday in Brussels.

Commission President Jean-Claude Juncker drafted the report with European Council chief Donald Tusk; the Eurogroup’s head Jeroen Dijsselbloem; Mario Draghi, the president of the European Central Bank; and European Parliament President Martin Schulz.

Coming ahead of an emergency EU summit on Greece Monday night in Brussels, a report on the future of the eurozone may seem ill-timed. But several governments, including Berlin, are more open now than ever to at least discuss steps toward deeper integration proposed by the “five presidents,” seeing it as a signal of reassurance to financial markets that the euro will endure any outcome on Greece.

The proposals mostly echo calls by Germany and other rich northern eurozone countries to enforce spending rules across the eurozone.

It won’t go down well in Greece or the poorer southern rim states, which want more “solidarity” within the eurozone — in other words, financial support in times of trouble. The report doesn’t foresee common lending (“euro bonds”) and only alludes to a “euro area-wide fiscal stabilisation function” in case national budgets are “overwhelmed.”

The “five presidents” call their proposal for future eurozone governance a “roadmap that is ambitious yet pragmatic,” sketching out several stages to deepen the union.

In a first “deepening by doing” stage, the EU would “build on existing instruments and make the best possible use of the existing Treaties” to enforce the eurozone’s fiscal rules.

The second stage, which potentially could mean changes to the EU treaties that would cause difficult discussions about transferring more powers to the EU, is not supposed to start until 2017, the report says.

A “genuine Fiscal Union” requires more joint decision-making on fiscal policy, the report says. While not every aspect of each country’s spending and tax policies will be overseen by Brussels, “some decisions will increasingly need to be made collectively while ensuring democratic accountability and legitimacy,” report says. It calls for a “future euro area treasury“ that “could be the place for such collective decision-making.”

Sources involved in the drafting process said that only three of the five “presidents” significantly contributed to the report: Juncker who oversaw the project; Draghi who has been advocating closer political ties among the euro states; and Schulz who seized on his inclusion after he was left out when “four presidents” issued a report on the future of the monetary union three years ago.

Although Tusk presides over Euro summits where eurozone leaders convene, he comes from a non-euro member and focuses on foreign policy more than economic affairs, according to aides.

Dijsselbloem wants a second term as chairman of the eurozone’s finance ministers and didn’t want to hurt his chances by taking a hands-on role in drafting the report, according to sources close to the drafting group of presidents.

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Acata

No.
The EU shall not have the right of Budget control, its a cornerstone of the souvereignity of a state and therefor should only be controlled by the parlaiment of said nation not of some international entity.
The EU Institutions just want to strengthen their power and weaken the states further.

Posted on 6/22/15 | 4:30 AM CEST

Lala

Yes!
Deeper integration or get out of the Euro. Half efforts are not working.

UK and others are welcome to become a full member or settle for Norway’s status.

Posted on 6/22/15 | 6:49 AM CEST

Christopher Colbourne

“Dijsselbloem wants a second term as chairman of the eurozone’s finance ministers and didn’t want to hurt his chances by taking a hands-on role in drafting the report, according to sources close to the drafting group of presidents.”…..A.K.A. How to keep your job in European politics….DO NOTHING!…This guy’s got it all figured out!

Posted on 6/22/15 | 9:05 AM CEST

Alan Ritchie

The Junker/Schultz axis at it again – were there any adults in the room when this junta was nodded into their posts?

I believe that Mr Mario Draghi is truly grasped the straw will the Eurozone should have used the barrel tax money double political investor Relations to stimulate the economy of the Eurozone and much earlier Furthermore it is important to remember that the economies that use the Euro common currency are deeply inter-released with the other member states of the European Union which has its own currencies so what´s the problem we have the right to demand a new Europe reformist and truly for all Europeans

Posted on 6/22/15 | 4:28 PM CEST

A Greek

This should have been put in place long time ago, when the monetary union was established. Had it been done, we wouldn’t be talking Greece right now. Noone in the euro zone should be allowed to “vote themselves rich”. The euro is a currency for more than one state, irresponsible communist ideology shouldn’t be allowed to ruin it for others.

Posted on 6/22/15 | 7:21 PM CEST

Divergent Southerner

Considering that nearly all nation states have richer and poorer regions that don’t converge as well as transfers from the former to the latter, why should we expect EU members to converge in a single market and why is it fair that there is no transfer union between them? Maybe poorer countries would be better off out of the EU.